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Election talk stalls debt payment

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Finance minister Tendai Biti says the deadlock in the inclusive government concerning when the country would hold elections is stalling efforts to clear a $7 billion international debt.

Zimbabwe is currently labouring under a large debt burden.

The accumulation of arrears and inability to service debt has denied the country access to funding and lines of credit from the international financial institutions, as well as bilateral and commercial creditors.

Biti said the inclusive government last year approved a payment plan to clear arrears of about $1,3 billion to the International Monetary Fund, the African Development Bank and the World Bank, a development that would pave the way for the resumption of credit lines.

“Our plan to deal with the question of debt is behind schedule. A lot of friends have to come on board if we are to succeed. We are worried about recent political developments,” Biti told the international media on Wednesday on the sidelines of an African Development Bank (AfDB) meeting in Lisbon.

President Robert Mugabe and his Zanu PF want elections this year while Prime Minister Morgan Tsvangirai insists the economy was still fragile to support such a process.

Biti however remained bullish and insisted the country’s economy would grow by 9,3% this year way above the average growth for the continent projected at 7,8% and 5,4% in 2012.

“We are going to rebound strongly on the back of a strong agricultural performance,” Biti said. “My biggest fear is that the political noises that have been coming up will have a debilitating effect on the economy.”

AfDB resident representative Mahamudu Bawumia early this year said clearance of arrears was key for the country to access potentially large amounts of financing, including from the AfDB for its development efforts.

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